OMAN - Part 1 - The Prospects & Geology.

The sultanate of Oman has the capacity to produce up to 950,000 b/d of crude oil, with a record output of 900,000 b/d reached in late 1996, compared to 600,000 b/d in 1990 and 400,000 b/d in the late 1970s. Efforts to raise the capacity to 1m b/d or above have been offset by a structural decline in some of the oilfields.

Oman's actual output now is limited to a little less than 900,000 b/d, as the sultanate is backing OPEC's efforts to defend oil prices by cutting supplies. The main concessionaire, Petroleum Development Oman (PDO), is producing 846,400 b/d. Three other producers, Occidental of the US, Japex of Japan and Petrogas, account for a another 48,600 b/d (see profiles of fields & producers in Part 2).

Despite the decline in some of the fields, Oman's proven oil reserves continue to exceed 5 bn barrels. Proven reserves of natural gas are expected to reach around 45 TCF by 2001 (see geology on following pages & reserves in Gas Market Trends).

Oman has shifted to natural gas for domestic energy. Now the local market only consumes about 55,000 b/d of oil. It will also shift to coal as more than 100 million tons of coal reserves in the Galan province will be developed by foreign companies. Oman is one of the richest Middle East countries in coal, copper, gold, silver, chrome and other minerals. Under a 1996-2000 plan, the government has invested heavily in developing these minerals and in diversifying its economy (see Downstream Trends).

Oman exports most of its oil to east of Suez markets. The main Oman blend is being used as a marker for sour crudes together with Dubai's. Oman is becoming an exporter of liquefied natural gas (LNG), with the first LNG shipment due in April 2000 (see Part 3). The state-owned Oman Oil Co. (OOC) is investing overseas (see Downstream Trends No. 7).

The chief executive in Oman is Sultan Qaboos Bin Said, who is prime minister and holds several other positions. His informal advisors include CEOs of important foreign companies and he personally supervises key oil deals, having to approve production sharing agreements. On Dec. 16, 1997, he appointed Dr. Mohammed Bin Seif Al Romhi as minister of petroleum and gas. Romhi, an engineer and until then professor at Sultan Qaboos University, replaced Said Bin Ahmad Al Shanfari who had been seeking retirement to concentrate on his business (see who's who in Part 4).